“IF I WERE…TIM LEIWEKE”

Apologies are becoming way too common in the LiveWorks Newsletter, but I must again say I’m sorry to subscribers for sending an old newsletter to you.  To say I’m frustrated with the situation is the understatement of the century…and if any of you know anything about FeedBurner (the service that sends newsletter subscribers their emails), please let me know.  If there is an upside, as promised, at least you didn’t get the “Recession” email again.  Now on to “If I were…”

It is hard for me to wrap my brain around AEG’s business.  They separate it into AEG and AEG-Live.  AEG invests what amounts to hundreds- of- millions in new venues around the world, while AEG-Live is the concert promotion and live entertainment company built around the acquisition of Concerts West.  With all the money flying around it is hard to say how or if AEG makes any.  Since they are privately owned, AEG doesn’t report their financials, so it is even harder for me to poke my big nose into their shit.  So more than ever, please read the following disclaimer:  The “If I Were…” series is based on not knowing what the day-to-day business realities are for those written about.  Also in many situations, I’m looking at decisions from the past after they have already been played-out (or are in the middle of doing so) so it isn’t necessarily fair to play Monday morning quarterback. Oh well!  Fair or not, I like playing the position, so here are some of the things I would do “If I were…Tim Leiweke”.

· MARKETING – AEG should market itself as if it were a public company.  Meaning, they should start reaching out to consumers as a brand.  This is a real opportunity to differentiate AEG events and venues from everyone else’s.  Market in and to your communities.

· FAN RELATIONS DEPARTMENT – Goldenvoice guys should certainly be a part of this unit (just look at what they’ve done with Stagecoach’s layaway plan).  Although as per above, the whole company should be behind this mission, AEG should have a department whose only job is looking after fans (sports, music, family shows, etc).  With the intelligence they can share with the rest of the company, AEG’s whole culture will move into the role.  Think about what you could implement.

· STOP THE BIDDING WARS – In the live music business, bidding wars do a huge disservice to fans by driving ticket prices up, and thus everything else.  Create a committee to look at each opportunity and make a quick assessment of it.  Adding layers of bureaucracy can sometimes actually speed-up the decision making process since every deal wouldn’t have to pass by Randy Phillips and/or Tim.

· ENERGY/GOOD CITIZEN – The new solar panels at LA’s Staples Center and the PR that went along with it is a great example of what I’m talking about.  Getting ahead of the competition by switching over to clean energy, recycling, conservation programs, etc, will not only save you money both now (through tax breaks and energy savings) and in the future (it is said that “U.S. companies can spend billions now or trillions later”), it will make consumers feel better about doing business with you (this has been proven).  Hire a “Green Czar” that’s responsible for these initiatives.  Build it into AEG’s DNA.  The changes that Wal-Mart found their “associates” have made and continue to make since the company started its greening is amazing (looking for ways to cut down on post-consumer packaging, energy saving ideas, and even eating healthier).

· VENUES – I’m sure this isn’t the first time you have heard that several of your new concert venues and theaters are feeling a little sterile.  I think a better analogy might be a modern AMC multi-plex.  Don’t get me wrong (or anyone else saying this), I appreciate not only the investment you are making into our business, but the thought you put behind building them (production manager’s dream, great sound, etc).   Maybe your architects know something the rest of us don’t on how things will look in the future or how the venues will wear over time, but right now they could use a little more character.

· FREQUENT BUYER PROGRAM – Reward loyalty with a program that gives fans discounts on tickets, early access to the best seats, special merchandise, VIP parking without paying for it, etc.  Give them a membership card with special stamps or stickers for each show, game, or special event they attend.  Consumers can show their friends.  Think of it like the concert T-shirt you wear to school the day after the show to let everyone know you were there.  It will work with sports fans young and old the same way it works for music fans.

· THE DENVER OFFICE – AEG needs more strong local promoter acquisitions like Chuck Morris and the Denver office.  In two-years, Chuck, Brent, Don, and company have not only built two new successful music festivals, they have also managed to give Live Nation a run for their money in a market where LN owns and/or controls several major venues in the market (thus the ability to offer more money in theory).  Coincidentally it was Chuck and team (and Barry Fey as it relates to Coors Amphitheater) that built-up most of those venues.

· THE BENCH – Almost repeating myself from the item above but not really.  For some reason there is a perception that AEG doesn’t have a deep bench.  Not sure that reality matches perception (Tim, Randy, Larry, Paul, John, Chuck, Debra, etc) but it is out there.  Might be time to speak with John Scher in New York, Arny and Jerry in Chicago, and more.

· BUY LIVE NATION – They should be willing to sell it right now at a real discount.  Go directly to those that hold the IOU’s and make an offer to buy the company @ $7 per share.  The stock could fall below $4 this week.  Make your move.  Stockholders like me will be really happy to get out alive and you would end at least one war.

· RESTART DIALOGUE WITH MSG & TICKETMASTER – If buying Live Nation doesn’t work out, how about trying to re-engage conversations with MSG and/or Ticketmaster?  Again, now might be the right time to talk as both Ticketmaster and MSG are on the move and cash is king.

· BRANDS – We in live entertainment are just not getting it right when it comes to working with brands.  AEG has a great sales team (I’m sure, never met them as I have the Live Nation team, who are also very good) for their building’s naming rights etc, but need to do even more to work across their multiple platforms (venues, local concerts, tours, sports).  It is time to breath new life into our business.  I bet there are some very smart marketing and branding types who are feeling rather concerned about their Detroit jobs these days.  Sunny California probably looks pretty good right about…now.  Bet they would work for less with a big upside too.

That should be enough to keep Tim and company going for a while.  Again, please know that just as with Michael Rapino, I don’t know the realities of Tim Leiweke’s job.  These are just ideas I would work towards knowing what I know, “If I were… Tim Leiweke”.

Talk with you soon,

Jim

TOP 10 WAYS TO THRIVE IN A DOWN ECONOMY

I was reading Entrepreneur Magazine’s 2009 Trend Issue and it became evident that what the editors were saying about “businesses to start in 2009”, could be applied to the live entertainment business.  So with that in mind, and a bunch of extra stuff added, here is the Top 10 Ways To Thrive In Today’s Down Economy. 

 

1)       GO GREEN – You have no idea how much money you can save.  Wal-Mart found out.  Appoint a “Green Czar” for your office with the idea of taking your company Carbon Neutral.  One easy way to get your staff into this is to pass a certain percentage of savings onto your employees; although you probably don’t need to do that (it is still a good idea).  Here are some other ones.  Recycling cans and bottles, switching to florescent light bulbs (also added bonus of saving on cooling costs in summer), maintain irrigation systems and change sprinkler heads over to water saving types, car pools, install motion detecting light switches, provide “power strips” for employees to plug all chargers and electronics into (this way one switch shuts off all…most power from electronics is used when the power is actually off), etc.  Also, the simple fact that going green is a trend makes consumers want to associate with your company or product. 

 

2)       USE TECHNOLOGY – The obvious web/mobile app that will have the most immediate impact on live entertainment is the paperless ticket.  There should be a real financial savings to consumers who choose this option.  When Ticketmaster’s business went from predominantly phone sales to the web, that savings was never passed on to the consumer.  One can argue there is a cost for keeping up with technology, but Ticketmaster would have never switched over if there wasn’t a huge cost savings.  You don’t have to pay for a computer’s healthcare, sick days, taxes, etc, after all. 

 

3)       MARKET TO BOOMERS – I think the folks from Entrepreneur said it best with boomers represent “the biggest wealth transfer in history”.  Average Net worth: $257,800, Average Annual Income $71,400, 38% expected to inherit $210,000 (average), 35% have already inherited $113,000 (average).  How about a “Financial Show”, couldn’t be better timing right now?

 

4)       THINK HEALTH – Whether it is something as simple as updating your food and beverage selections, or you are developing a health related consumer show (maybe related to aging, see #3), heath is on everyone’s mind.  You should be thinking about this in your business.  Even keeping up with your staff’s healthcare maintenance can save you money by saving your employees trips to the doctor. 

 

5)       MARKET TO GENERATION Y – Echo Boomers, or whatever you call them, now number 75 million in the U.S. (Source: Deloitte Consulting), with buying power of $1 trillion (Source: U.S. Census Bureau).  Find ways to reach this game loving, social networking, born on a computer audience and get yourself a piece of that $1 trillion.  Wouldn’t suggest a “gaming tour” or festival just yet.  So far, no one has been able to figure out that model. 

 

6)       DROP OR RAISE YOUR PRICES – Look at the market.  For every case of an overpriced ticket, there is an under priced one (maybe in another show category, but you can find it).  There are so many examples of events raising their ticket prices and seeing a large sales spike.  Unfortunately, the opposite is true more often. 

 

7)       CHANGE YOUR MARKETING – We in the live business need to catch-up with the rest of those that market products.  This doesn’t have to be about spending money, but it does have to do with creativity and innovation.  Time to start listening to the young people in your office.

 

8)       STOP SPAMMING, START COMMUNICATING – I’m as guilty of this as anyone and it must stop.  Just because you have a database and a consumer gives you permission to send them info, doesn’t mean you should be sending them 3 emails per week.  Develop a dialogue with your fans and watch your business flourish. 

 

9)       FITNESS IS BACK – I would be really interested to see if places like Canyon Ranch are down in this economy.  Either way, fitness is back on consumer’s minds.  How can you work this into what you are doing in your business?  How about staging the world’s largest spinning class where a portion of the proceeds go to Lance Armstrong’s “Live Strong” campaign?  How about installing a small fitness room in your office (you would be surprised how little it can cost)?  It is proven that those that workout have more energy than those that don’t and are able to concentrate on better at work. 

 

10)     ENERGY – This has to be top-of-mind with most people these days.  Consumers couldn’t be more confused on what the options are, which ones are best, etc.  Create a show that addresses energy, and if it is entertaining and priced right, it will sell for sure.

Please always remember that we are in the live entertainment business.  It is our job to get people out of their homes and make them happy, educate them, and break them out of the funk they are in.

Talk to you soon,

 

Jim